\section{Main Focus}
\label{sec:focus}

In this section we want to describe the reasoning behind our choice of problem area, main subject, and research question from a top-down perspective. We begin by describing how consortia and standardization are interrelated and in that context we discuss how the consortia constellation can be a valuable way of doing business.

We will also discuss the possible downsides by doing business in consortia. When big companies work together, it seems obvious to make the assumption, that it is necessary for the consortium to share interests and agree on some common goals. In innovative industries like the ICT industry, the creation of and competition between new standards is a key factor for success. There are some core difficulties for consortia as to the process of standardization, which we will go into depth with. 

One of the main issues is the fact that standards are deeply rooted in the business models of the consortium partners and the fact that innovative standards inherently come along with intellectual property rights. When the partners are direct competitors outside the consortium, complexity regarding agreement on common goals increases and innovation is possibly harmed.

At last we will explain and elaborate on our research question based on the above mentioned discussions.

\subsection{Standardization, Consortia and Ecosystems}

The information technology industry is closely connected to standardization, and the battle of standard setting is an inevitable fact. A standard war happens when \textit{``two new incompatible technologies struggle to become a de facto standard.''} \citep[p. 261]{SHAPIRO} In this research we want to dig into the concept of a standard war in a consortium context. A consortium is basically a form of association of different partners, typically companies or organizations, who ally to fulfill a common goal, which 
\begin{quote}
\textit{``may be as narrow as setting a consensus-based interface standard for music hardware and software (i.e., the MIDI Manufacturer's Consortium), or as wide as promoting standards perceived as being necessary to enable the effective development of a new type of programming.''} \citep[p. 144]{UPDEGROVE} 
\end{quote} \bigskip 

\noindent More specifically we are investigating the complexity of standardization and innovation in a consortium with competing partners in a constantly evolving and innovating industry. We do this partly by drawing on network and feedback literature, which describes some important characteristics of this industry.

The ICT industry has gone from being \textit{``driven by economies of scale''} to be primarily  \textit{``driven by economies of networks.''} \citep[p. 173]{SHAPIRO} This can be described as positive feedback, which \textit{``makes the strong grow stronger and the weak grow weaker''} \citep[p. 174]{SHAPIRO} The power of a broad network is a strong weapon in a standards war, and a consortium has the advantage of being able to draw on the existing networks of its partners. The gained importance of ICT in the last two decades has \textit{``creat[ed] network externalities for the users and increasing returns for the producers.''} \citep[p. 1]{COULON} In an industry with an accelerating rate of change, standards form a solid basis for innovation because they allow \textit{``new technical connections between equipment and networks (standards of compatibility)''} \citep[p. 82]{FORAY} The creation and implementation of standards in ICT can create great value for a consortium because of the potentially extensive network effects.

When discussing consortia and networks, it is natural to relate to literature on Open Innovation Ecosystems. An ecosystem is simply a conception that sees a set of companies as a viable interrelation of organisms. An ecosystem can be understood as an arrangement to create and control value networks where \textit{``complementary products are considered in combination with the value chain.''} \citep[p. 3]{WESTWOOD} When studying consortia, ecosystem considerations seem like a requisite.

Literature on ecosystem management often mention the concept of Open Innovation to describe how different collaborators generate and maintain an innovative environment resulting in competitive products. Henry Chesbrough defines Open Innovation as \textit{``the use of purposive inflows and outflows of knowledge to accelerate internal innovation, and expand the markets for external use of innovation, respectively.''} \citep[p. 2]{CHESBROUGH} Contrary to a closed model of innovation where \textit{``projects can only enter in one way, at the beginning, and only exit in one way, by going into the market, [resulting in] a notoriously inwardly focused culture''} \citep[p. 4]{CHESBROUGH}, Open Innovation supports that \textit{``projects can be launched from either internal or external technology sources, and new technology can enter into the process at various stages.''} \citep[p. 4]{CHESBROUGH} So, the management of an ecosystem is a complex task of maintaining a unified Open Innovation environment among member firms, resulting in a high rate of interdependency \citep[p. 4]{WESTWOOD}


\bigskip

\noindent In this context Varian and Shapiro conclude that \textit{``choosing and attracting allies is a critical aspect of strategy in the network economy''} \citep[p. 259]{SHAPIRO}. Ancarani and Shankar also conclude that 
\begin{quote}
\textit{``[m]anagers face two key strategic challenges when competing in convergent industries: (1) maintaining focus on customer relationships; and (2) identifying partners for strategic alliances and managing the alliances, often collaborating with competitors in traditional industries.''} \citep[p. 57]{ANCARANI} 
\end{quote}
It seems appropriate to assume that the composition of allies strongly influence how standardization and innovation are interrelated in a consortium. This will be discussed in the following subsection. 


\subsection{Standards, Business Models and IPR}

Literature shows that consortia has the potential to be a very effective way of doing business in a highly innovative and evolving industry. Despite these rather obvious advantages of forming a consortium there are several, yet more intangible, drawbacks of this kind of companionship. We will go through literature which indicates these possible disadvantages and thereby gradually approach the scope of this research. \bigskip

\noindent Krechmer writes that \textit{``[a]s the complexity of technology increases, the complexity of standards that define the technology also increases.''} \citep[p. 51]{KRECHMER} As Open Innovation Ecosystems, ICT consortia are working with a increasingly complex set of standards, which are vital for the direction of a new innovative technology. If one cannot agree on the standards route, one cannot clearly define a new technology. Certain circumstances potentially entail such a disagreements.

Hawkins and Ballon discuss the role of standardization in various consortia and conclude that what \textit{``we have viewed primarily as a standardization process has become an element in business model design.''} \citep[p. 28]{HAWKINS} When standardization becomes a part of business modeling instead of solely being grasped as a basis for innovation, negative forces can undermine the initial purpose of a consortium. Updegrove writes about consortia, that \textit{``[a]mong their vices is a propensity for individual companies to promote their self-interest, a goal sometimes facilitated by [...] less formal processes.''} \citep[p. 144]{UPDEGROVE} This point is extended by Hawkins and Ballon who explain that consortia partners \textit{``develop common technical specifications using often similar but almost entirely uncoordinated methods and processes.''} \citep[p. 20]{HAWKINS} \bigskip

\noindent Intellectual Property Rights (IPR) and patents are meaningful for a company to include in their business model, especially if they can become a commonly used standard. The issue of uncoordinated and inappropriate ways of standard-setting in consortia is catalyzed by the introduction of IPR and \textit{``the process of creating an effective consortium structure begins with careful analysis of all factors (including proprietary forces)''.} \citep[p. 147]{UPDEGROVE} Coulon concludes that 
\begin{quote}
\textit{``[f]irms which have patents related to a new technology that is beneficial to standardise, are pressing ahead standardisation process before competitors can ``invent around'' its patents and demand cheaper licensing fees. [...] Firms with competitors that have relevant patents in technology that is beneficial to standardise, are consciously delaying standardisation until there are competing patented technologies with cheap licensing fees.''} \citep[p. 13]{COULON2} 
\end{quote}
The consortia way of doing business in a convergent and constantly evolving industry can be dangerous, particularly if the \textit{``alliance only [consists of] competitors, because this may limit their ability to create new knowledge.''} \citep[p. 73]{ANCARANI} When partners are direct competitors the inevitable inclusion of IPR in standard-setting prevents innovation instead of establishing a robust basis for it. Krechmer writes that \textit{``[p]atents that are applied to interfaces (patents on compatibility) appear to sow disagreement, slow innovation, and tax users without representation.''} \citep[p. 51]{KRECHMER}

The potential consequences of constructing an unbalanced, inter-compe{\-}titive Open Innovation Ecosystem (the engine of a consortium), under the sway of IPR, are summarized by Updegrove: 
\begin{quote}
\textit{``Any vendor seeking to steer a standard too closely towards its own technology must be mindful that if the standard is never widely adopted, the vendor not only may fail to reap the special advantage that it sought, but may also in fact jeopardize its entire business when the standard underlying the development of its product line is not seen by its potential customers as being useful.''} \citep[p. 144]{UPDEGROVE} 
\end{quote} 
Positive feedback will be turned around into negative feedback, where big and complex structures of ecosystems get burdened with disagreements regarding standards and accordingly slow innovation, which gives smaller companies the possibilities to gain market share. 


\subsection{Elaboration of our Research Question}
\label{subsec:elaboration}
By referencing existing literature we have showed that consortia is a potentially very valuable way of organizing business around a complex ecosystem in a convergent industry. But the complexity can be dangerous and prevent necessary innovation processes in the consortium, and it is seriously threatening the idea of Open Innovation when IPR is influencing decisions regarding standards. Literature shows that the ownership of patents can cause conflicting interests regarding standardization inside the consortium, and this is an aspect we want to explore. \bigskip

\noindent We have chosen Symbian as subject because of its history of a period with huge success followed by a fatal period of adversity. Our primary focus is to investigate how the issues of Symbian can be explained in a standardization conceptualization and by that understand how conflicting interests have played a role in the downfall of Symbian and how these can be seen from a standardization perspective. We want to make research that reveals the reasons behind these conflicting interests and discuss the effects of these. We want to find out how such conflicts have influenced the ability to innovate in the consortium and thereby undermine the original purpose of an ecosystem. \bigskip

\noindent Existing literature has pointed out potential issues for Symbian and some of it gives the impression that our focus is relevant. Hawkins and Ballon have pointed out that the separation between an open platform (Symbian) and non-standard proprietary user interfaces (series 60) \textit{``has undermined the potential of the Symbian ``open standards'' strategy. [...] The greatest danger for Symbian as a standard is not any external competitor but the Symbian licensees themselves.''} \citep[p. 25]{HAWKINS} This research was done in 2007 - right before Symbian began loosing market share. Our research can be seen as a further development of the research done by Hawkins and Ballon, where we investigate the implications of their predictions.

Ancarani and Shankar point out the symmetric knowledge of the Symbian partners as a possible obstacle for creating new knowledge. They have symmetric knowledge because the consortium \textit{``is made of similar partners [...] coming from the mobile phone industry.''} \citep[p. 73]{ANCARANI}

%\todo{Maybe add some more references to literature about Symbian specifically. Joel West \& David Wood, Fabrice Coulon: Proprietary Standards inside Symbian, etc.}

\subsection{Limitations}
\label{subsec:limitations}

\noindent We do not take into consideration the economic consequences of being a first-mover on the smartphone market. Former CEO of Symbian David Levin, explain one of their impediments to including wifi-capabilities into their operating system:

\begin{quote}

\textit{``... the operators would say: ``we will not certify a phone, which is wifi capable, because they had just paid a huge amount of money for 3G licenses.'' And they said, if you are going to have the business model in particularly, Western Europe, as a subsidised handset, so that the operators pay to get the handset out, they said why should we pay to take a handset, which doesn't even use the network. Why should we give our money to pay for a handset, and expensive handset, to put it in some kids hand who then is gonna go and have free broadband. Right.''} (Track 2: 22:49)

\end{quote} 

\noindent We will analyse the failure of Symbian on the basis of standardization concepts. We will not focus on technical standards and technical standard setting processes inside the consortium. Moreover, as it is a university project we are facing a time limit, which may constrain us from getting enough output from our data gathering and thus constrain us from broadening our research, but this leaves us with opportunities to do further research.



%Hopefully we get some insight of what can go wrong when working in consortia.

%Also something about open innovation in consortia which can be questioned when so many patents and interests are influencing the direction of the consortium.
